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Old 10-15-2019, 07:57 PM
cokiwah cokiwah is offline
Join Date: Aug 2012
Posts: 312
Default How to implement binned/combined variables into rating plan?

1) I am using an indicator variable in a GLM (i.e. 1 or 0) to capture a variable that is 0,1,2,3. I'm doing this because of thin data at 2 and 3.

To implement into rating plan, is it as simple as doing exp(coefficient*2) for 2 and exp(coefficient*3) for 3?

2) Another question, I am using a sum of frequencies as a variable. Each individual term in the sum relates to a cause of loss. Do I use the coefficient that comes out of the GLM for each of the cause of losses?
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